Introduction
Several reasons explain how General Electric performed well regardless of its focus on diverse businesses, which can be considered unrelated. With its CEO Welch, GE made much to achieve positive results in the company’s business success. Welch created a new vision for the leader’s strategy called the Three Circle Concept to define the typical approach for each particular unit to meet the potential obstacles (Bartlett and Wozny 2).
Furthermore, he investigated three future efforts, including the Six Sigma method, the boundaryless company, and the standards of excellence (Bartlett and Wozny 12). Welch also created the “Four Players” approach to teaching his staff to work harder (Bartlett and Wozny 13). Due to the leadership methods that allow the company to function successfully without additional employee efforts, Welsh is regarded as one of the most outstanding GE CEOs. The strategies GE uses are the simplicity of the organizational structure and training of the employees, which allows the company to minimize risks and problems.
Welch’s Approach to Management
Welch believes that more than book education is needed to become a great manager, and it takes job experience and resilience to become better than the best. In GE’s 1995 Annual Report, Welch addressed this criticism head-on by highlighting the corporate strategy to continue growing, with the only spin-off that focused on increasing cash flow (Bartlett and Wozny 12). Despite the criticism he encountered, Welch elaborated several tactical initiatives by empowering the workforce; the corporate strategy has been discovered to promote best practices to raise organizational productivity. These aspects have revolutionized the company’s performance, making it more practically applicable and responsive to changes.
International Expansion and Revenue Growth at GE
The innovative approaches showed top managers that they mostly lead their situations incorrectly, and the strategic methods proposed by Welsh worked successfully. To boost the company’s overall revenue, Fresco, which was in charge of the worldwide functioning, had entered into many agreements with Toshiba, Sovac, and Robert Bosch (Bartlett and Wozny 5). With the help of internationalism, GE’s revenues increased by 50% in just five years, totaling $42.8 billion (Bartlett and Wozny 6). Over Welch’s two decades as CEO, GE’s top line increased by 377%, showing his changes’ efficiency (Bartlett and Wozny 19).
The Integration Model and Building a Boundary-Less Workplace
GE created an “integration model” to create a boundary-less workplace where everyone struggles to develop novel ideas and can coexist in a welcoming and anti-parochial setting (Bartlett and Wozny 9). This model aids in bringing acquired companies’ accounting into line with GE’s model. As a result, the organization received financial benefits from the changes Welsh started.
Six Sigma, the Four Players Strategy, and Cultivating A-Players
General Electric is a highly diversified company that is considered unrelated but successful during this period. GE could scale down on its typical product concept by purchasing several service companies like Peabody and Kidder in 1994 (Bartlett and Wozny 10). Welch used the Six Sigma technique to improve the product’s quality while cutting costs to avoid this situation (Bartlett and Wozny 12).
Welch also created the Four Players Strategy to prepare his staff to work at greater levels. In the end, this software became what Welch referred to as “A-Players with 4 Es”. Energy, Edge, and Execution were listed as the characteristics of an “A-Player” (Bartlett and Wozny 13). These characteristics show that GE’s strategy was focused on achieving positive results and was effective from a financial perspective, as the statistics show.
Inductive Strategic Decision-Making and Departmental Coordination
The case study shows that General Electric uses induction to make strategic decisions, not deduction. In other words, the organization does not elaborate on changes after the problem appears to be solved and eliminates the adverse effects. Instead, GE aims to prevent problems by instructing employees, training them, and sharing knowledge between departments (Bartlett and Wozny 2). This allows the company to know the potential challenges in advance and avoid them.
It is possible to make parallels between the notion of induction in strategic choice and the organization’s structure. For example, GE has a simple structure that supposes that all departments have precise and adequate functions they can complete (Bartlett and Wozny 2). The marketing department does not work with financial questions, but they teach workers within their department, preparing them for the challenges. Japanese companies have group functions, so employees learn everything from each other (Bartlett and Wozny 9). After that, the company has divisions for specific products or service lines, which supposes simplicity in pursuing its responsibilities, while having a circular matrix structure can result in internal conflict or competition.
These details show that GE could simultaneously launch products across Europe in multiple countries, not just Germany, due to its coordinated launch strategy. When all departments understand their responsibility and share knowledge, they can achieve good multitasking results. If the company starts the coordinated launch, it will not need to change its structure significantly because every department has limited responsibilities. In this case, they will pursue the new plan and follow the pattern they used with other projects.
Conclusion
It allows the conclusion that the lessons learned from GE can be applied to the work of other organizations. For instance, I plan to use this knowledge in my future career because teaching employees and sharing the experience required to overcome expected problems are essential. Even though there are many critical situations in business that the leaders cannot predict in advance, they are comparatively rare, and most challenges are typical. As a result, it is possible to create rules and formulas that the employees can use in typical situations to facilitate the company’s functioning.
Work Cited
Bartlett, Christopher, A., Wozny, Meg. “GE’s Two-Decade Transformation: Jack Welch’s Leadership.” Harvard Business School Publishing, 2005, pp. 1-25.